Growing Small Businesses Choose Bigger Projects
In the first six months of 2014, Mercantile Capital Corporation provided SBA 504 loans for projects worth $80.1 million, creating 504 jobs in nine states.
ORLANDO, Fla., July 17, 2014 /PRNewswire-iReach/ — Mercantile Capital Corporation announced today that it closed 18 U.S. Small Business Administration (SBA) 504 loans in the first six months of 2014. Totaling $80.1 million in total project costs, these loans created 504 jobs in nine states. Mercantile has specialized in providing SBA 504 loans since its founding in 2002, and has become recognized industry-wide as a leading specialist in the 504 program, now also known as the Real Estate Advantage Loan (REAL) program.
The largest loan closed by Mercantile so far in 2014 was for a $12.1 million industrial facility acquisition for T.C. Millwork, Inc., a manufacturer, distributor and installer of display products. For three years, the company operated in three separate locations before consolidating all of its operations into a leased 428,867 square foot facility in 2006. Facing rising rental rates, T.C. Millwork decided to purchase the property it occupied, saving approximately $376,000 per year in rent expense. “We were able to get the loan we needed with just 10% down,” said co-owner Dennis Kubach. “The SBA 504 loan was the best deal out there for us, and Mercantile’s expertise was indispensable.”
A Growing Trend
According to Mercantile CEO Chris Hurn, there is a trend of small businesses making the move to commercial property ownership. “Growing small businesses get to a point where they have to reevaluate their commercial property situation,” says Hurn. “Taking control of a business’s real estate expense by owning commercial real estate avoids rental rate hikes and makes it possible to continue growing and plan for future growth.”
In addition, many of Mercantile’s clients are taking the opportunity to purchase and build spaces that help them become more efficient and more competitive. Hurn cites this as a reason why Mercantile’s average per-loan project cost for 2014 is $4.0 million, up 62% over its 12-year historical average of $2.5 million. “The projects we’re doing these days are much bigger and more complex than what often comes to mind when people think of SBA loans,” Hurn says. “It’s clear that the SBA 504 loan program is becoming more well-known, and more small business owners as well as small business advisors truly understand its benefits.”
The rest of the top five largest loans by Mercantile in the first half of 2014 include an $8.5 million refinance of a water park and ski resort in Scranton, PA; an $8.3 million hotel acquisition in East Brunswick, NJ; a $7.9 million industrial facility acquisition for a pharmaceutical manufacturer in Irwin, CA; and a ground-up construction and equipment project for a recycling plant in Cocoa, FL.
About the SBA 504 Loan Program
The SBA 504 loan program allows small business owners to finance fixed assets (commercial real estate and equipment) with long-term, below-market, fixed interest rates. These loans are designed to finance the total project cost, including purchase price, construction/renovations, equipment, soft costs, and closing costs. A typical 504 loan project requires only 10 percent equity (down payment) from the small business borrower, with the remaining amount split between a first mortgage provided by a commercial lender and a second mortgage provided by a Certified Development Company (CDC). The program is self-funded and historically has been operated at a zero-subsidy status within the Small Business Administration.
Mercantile Capital Corporation is one of the nation’s leading providers of commercial real estate financing for small business owners via the SBA 504 loan program. As of June 30, 2014, Mercantile has closed 532 loans to fund projects worth more than $1.47 billion in 39 states, Puerto Rico, and the District of Columbia. A primary aim of the SBA 504 loan program is job creation and retention, and the company’s lending activities have helped create and/or retain a total of 9,907 permanent jobs since 2003. An industry leader for more than a decade, Mercantile has been on the forefront of efforts to grow the SBA 504 program by improving efficiencies, educating the marketplace, and leveraging technology. Its SmartChoice® Commercial Loan Calculator smartphone app, for example, provides instant and accurate monthly payment estimates, and has been downloaded by more than 6,900 users. In late 2012, CEO Hurn wrote the first book on SBA 504 loans entitled The Entrepreneur’s Secret to Creating Wealth, which quickly became an Amazon bestseller.
For more information, visit www.504Experts.com and www.504Blog.com. For media requests and questions, contact Chris Hurn, CEO of Mercantile Capital Corporation, at 407-786-5040 or ChrisHurn@MercantileCC.com.
Media Contact: Chris Hurn, Mercantile Capital Corporation, 407-786-5040, firstname.lastname@example.org
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SOURCE Mercantile Capital Corporation